Friday, 16 September 2011

Letter to Rugby Observer on need for Citizens' Quantitative Easing


Copy of my letter to the Rugby Observer (not published)


Sir,

As we contemplate the publication of the Independent Commission on Banking this week, we should reflect on the double-whammy suffered by 'ordinary' people. Despite the financial crisis not having been of their making, they are both being required to fund the bailouts through and also suffer the most as a result of the cuts to services and tax rises. As the Institute for Fiscal Studies (which is respected by the Government) says in its study today, living standards for families will be down 10% and the poorest will suffer most from the austerity measures brought in by George Osborne.    

Throughout all this, the Government has shown a willingness to offer largesse to the banking sector. In addition to huge taxpayer-funded bailouts, the Government, via the Bank of England, has printed £200bn through Quantitative Easing. This was done, we are told, to encourage them to lend into the 'real' economy. They are not doing so. What is required now is not more of the same, but what I've termed Citizens' Quantitative Easing, which directly benefits ordinary people, doing ordinary jobs, creating real and socially productive economic activity. Citizens' QE, could comprise the issuing of a £200 voucher to all over the age of 18 which would be time-limited; non-transferable; non-cashable by the recipient; and limited to the purchase of certain goods and importantly, services from SMEs rather than large corporations. 

The money used to cash the vouchers would be created, or 'printed' by the Government, and as such would not require further borrowing. On ONS population figures, such system would cost £9.6bn - small change compared with the hundreds of billions of taxpayers' money already spent propping up the banks. Critics will argue that such a move would be inflationary. It is more likely that the powers that be do not want to let the cat out of the bag that the kind of state intervention done in an instant for the City can actually be replicated on behalf of ordinary citizens. Were such news to leak out, who knows what citizens might demand.

Yours faithfully,

John Slinger (Labour Party member and Editor of Pragmatic Radicalism: Ideas from Labour's New

Thursday, 8 September 2011

The Guardian publishes my letter calling for Citizens' Quantitative Easing

The Guardian today publishes my letter calling for Citizens' Quantitative Easing. The letter was in response to Simon Jenkins' column.

The idea of Citizens' QE will be the idea I present (in 2 mins) at the Pragmatic Radicalism Labour Party fringe event on Monday 26 September.



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Sir,

Simon Jenkins says correctly that the objective should be "people spending, shops ordering, factories reopening and services employing"; and a voucher scheme for leisure spending, as tried in the Far East, warrants support. In addition to huge bank bailouts, the Bank of Englandhas printed £200bn through quantitative easing. This was done, we are told, to encourage the banks to lend to the real economy. They are not doing so.


What is required now is not more of the same, but citizens' quantitative easing, which would directly benefit ordinary people doing ordinary jobs, creating real and socially productive economic activity. Citizens' QE could comprise the issuing of a £200 voucher to everyone over the age of 18 which would be time-limited, non-transferable, non-cashable by the recipient and limited to the purchase of certain goods and services from small- and medium-sized enterprises, rather than large corporations. The money used to back the vouchers would be printed by the government and would not require further borrowing. Such a system would cost £9.6bn – small change compared with the hundreds of billions of taxpayers' money already spent propping up the banks. State intervention done in an instant for the City can be replicated on behalf of ordinary citizens.